No-one is re-instating this line beyond it's current extent at Boulby. Ain't never going to happen. Even during the hayday of railways it only ever made money on summer weekends when the trains were thronged with people going to the seaside. There's an interesting book written by a local historian that looks at the finances of the line and concludes that if you're generous it may, just about, have covered operational costs most of the time but never even vaguely approached covering the costs of construction (investors saw pennies to the pound in return for their investment).
If you looked to reinstate it then it probably could cover it's operation costs again but it would never even vaguely approach covering the costs of reinstatement. And, as noted, there is a good bus service out there (though it does take an age so even with the circuitous route the train may actually be quicker).
Whilst the track bed between Staithes and Sandsend is relatively complete and unencumbered by modern construction, between the current limit of the line at Boulby and beyond Sandsend into Whitby there is a quite a lot of modern construction to navigate. But the biggest issue is by far the infrastructure that would be required.
The tunnels themselves could certainly be reinstated but I bet they'd need to be re-bored rather than reconditioned. Kettleness tunnel is in fairly good condition, reasonably dry and almost looks like it could go back into service. But Sandsend tunnel is a fairly dire state and will probably suffer a major collapse before too long. The northern portal has already fully collapsed so requires scrambling to get past whilst the tunnel lining is beginning to form major cracks and distortions. Probably only be a few more winters before something big gives way. I've never explored the tunnels myself (when I went to investigate the Kettleness tunnel had been blocked with a chunky padlock and metal door) but the above is what I've been able to divine from a few different places online. But even then there's a significant number of viaducts that would have to be totally reinstated and would require vast sums of money to buy the necessary land and then go on to build.
I would dearly love to see the line re-instated or having never been shut to begin with (the views I'm sure must have been spectacular beyond Staithes as they were quite good from just walking the track bed! You can get idea of it from this
video) but it would never ever make sense to spend the money on it.
If you're looking for projects on the Tees Valley in terms of re-opening or re-instating lines then you should be looking at re-opening stations as far as Loftus on the open section of the line (I'd suggest Skelton, Brotton, Carlin How and Loftus) though you still have the issue of not serving Saltburn without somehow shoehorning in a new chord from the line out towards Boulby and the station itself. The other project would be to reopen the line to Guisborough with a station near where the original was and also probably around Hutton Lane (and if we're feeling really extravagant a park and ride at Pinchinthorpe). Of course this project is now considerably harder as there's a new estate around Hutton Lane and they've recently built over the open land that was close to the old station site.
Either of those would be a far better choice of spending limited money on a significant project to expand the rail network around these parts than re-instating the line to Whitby.
Or maybe not with those curves.
